Some backstory on O'Shea dismissal *

Times publisher David Hiller tells his newspaper's reporter that he did not fire his editor — "Jim and I decided we no longer saw things the same way about how to take the company forward." But Jim O'Shea says: "From my perspective he made the decision to terminate me. I cannot comment further without talking to my attorney." Not to call their publisher a liar, but the LATimes.com headline still says Editor dismissed. (* It has now changed to Times editor to leave paper.) More from the LAT's updated web story:

The dispute came to a head Jan. 7 when Hiller and O'Shea had lunch at a downtown L.A. restaurant. O'Shea's departure, which was to be announced this week, was initially reported Sunday on the Wall Street Journal's Web site.

It wasn't immediately clear when O'Shea would leave and who would succeed him. Speculation in the newsroom was that leading candidates were John Arthur, the paper's managing editor, or Russ Stanton, the innovation editor.

The next editor of The Times, the nation's fourth largest daily newspaper, will be the fourth in less than three years.

The Los Angeles Times was in turmoil last night after its top editor was fired for resisting budget cuts by the paper's parent company for the second time in 15 months....

Sources who declined to be named because of the sensitivity of the situation -- a company spokeswoman would not even confirm the firing -- said O'Shea prided himself on holding the budgetary line and did not want a shrunken newsroom to be his legacy. While they said the proposed cutbacks were relatively small -- about $4 million, out of a budget of $120 million -- and did not involve significant layoffs, the reductions would follow a steady pace of budget-slashing since the Tribune Co. bought the Times in 2000, including about $10 million last year. The Times editorial staff has been cut from 1,200 to fewer than 900 since then, while circulation has declined from a peak of 1.1 million to about 800,000.

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Newsroom morale was battered after Baquet's ouster, but O'Shea had made great progress in convincing his colleagues that he would defend the paper against unreasonable cutbacks.

O'Shea is said to have been particularly concerned about further reductions in a year in which the paper has to cover a presidential election and the Beijing Olympics. The sources said Managing Editor John Arthur is likely to be named acting editor to provide at least temporary stability.

Quick refresher on the recent past at First and Spring: Publisher John Puerner resigned in 2005, reportedly over plans to scale back the Times to increase profits. Editor John Carroll resigned later that year, warning that cuts desired by Tribune would seriously reduce the LAT's appeal to readers, who already were fleeing in high numbers. New publisher Jeff Johnson was asked to resign in 2006, after refusing to enforce cuts he said would hurt the paper's journalism. Editor Dean Baquet also got nudged out in 2006, after refusing to make cuts he said would make the Times second-rate. Even though the Tribune is under new management, now O'Shea has been ousted too over the same issues.